May 23 - USDA Announces Farmer Support for Trade Retaliations & Disruptions

USDA Announces Support for Farmers Impacted by Unjustified Retaliation and Trade Disruption

U.S. Secretary of Agriculture Sonny Perdue today announced that the U.S. Department of Agriculture (USDA) will take several actions to assist farmers in response to trade damage from unjustified retaliation and trade disruption. President Trump directed Secretary Perdue to craft a relief strategy to support American agricultural producers while the Administration continues to work on free, fair, and reciprocal trade deals to open more markets in the long run to help American farmers compete globally. Specifically, the President has authorized USDA to provide up to $16 billion in programs, which is in line with the estimated impacts of unjustified retaliatory tariffs on U.S. agricultural goods and other trade disruptions. These programs will assist agricultural producers while President Trump works to address long-standing market access barriers.

“China hasn’t played by the rules for a long time and President Trump is standing up to them, sending the clear message that the United States will no longer tolerate their unfair trade practices, which include non-tariff trade barriers and the theft of intellectual property. President Trump has great affection for America’s farmers and ranchers, and he knows they are bearing the brunt of these trade disputes. In fact, I’ve never known of a president that has been more concerned or interested in farmer wellbeing and long-term profitability than President Trump,” said Secretary Perdue. “The plan we are announcing today ensures farmers do not bear the brunt of unfair retaliatory tariffs imposed by China and other trading partners. Our team at USDA reflected on what worked well and gathered feedback on last year’s program to make this one even stronger and more effective for farmers. Our farmers work hard, are the most productive in the world, and we aim to match their enthusiasm and patriotism as we support them.”

Background:
American farmers have dealt with unjustified retaliatory tariffs and years of non-tariff trade disruptions, which have curtailed U.S. exports to China. Trade damages from such retaliation and market distortions have impacted a host of U.S. commodities, including crops like soybeans, corn, wheat, cotton, rice, and sorghum; livestock products like milk and pork; and many fruits, nuts, and other crops. High tariffs disrupt normal marketing patterns, raising costs by forcing commodities to find new markets. Additionally, American goods shipped to China have been slowed from reaching market by unusually strict or cumbersome entry procedures, which affect the quality and marketability of perishable crops. These boost marketing costs and unfairly affect our producers. USDA will use the following programs to assist farmers:

    Market Facilitation Program (MFP) for 2019, authorized under the Commodity Credit Corporation (CCC) Charter Act and administered by the Farm Service Agency (FSA), will provide $14.5 billion in direct payments to producers.
o  Producers of alfalfa hay, barley, canola, corn, crambe, dry peas, extra-long staple cotton, flaxseed, lentils, long grain and medium grain rice, mustard seed, dried beans, oats, peanuts, rapeseed, safflower, sesame seed, small and large chickpeas, sorghum, soybeans, sunflower seed, temperate japonica rice, upland cotton, and wheat will receive a payment based on a single county rate multiplied by a farm’s total plantings to those crops in aggregate in 2019. Those per acre payments are not dependent on which of those crops are planted in 2019, and therefore will not distort planting decisions. Moreover, total payment-eligible plantings cannot exceed total 2018 plantings.
o  Dairy producers will receive a per hundredweight payment on production history and hog producers will receive a payment based on hog and pig inventory for a later-specified time frame.
o  Tree nut producers, fresh sweet cherry producers, cranberry producers, and fresh grape producers will receive a payment based on 2019 acres of production.
o  These payments will help farmers to absorb some of the additional costs of managing disrupted markets, to deal with surplus commodities, and to expand and develop new markets at home and abroad.
o  Payments will be made in up to three tranches, with the second and third tranches evaluated as market conditions and trade opportunities dictate. The first tranche will begin in late July/early August as soon as practical after Farm Service Agency crop reporting is completed by July 15th. If conditions warrant, the second and third tranches will be made in November and early January.

     Additionally, CCC Charter Act authority will be used to implement a $1.4 billion Food Purchase and Distribution Program (FPDP) through the Agricultural Marketing Service (AMS) to purchase surplus commodities affected by trade retaliation such as fruits, vegetables, some processed foods, beef, pork, lamb, poultry, and milk for distribution by the Food and Nutrition Service (FNS) to food banks, schools, and other outlets serving low-income individuals. 

    Finally, the CCC will use its Charter Act authority for $100 million to be issued through the Agricultural Trade Promotion Program (ATP) administered by the Foreign Agriculture Service (FAS) to assist in developing new export markets on behalf of producers.

Further details regarding eligibility and payment rates will be released at a later date.



Nebraska Farm Bureau Reaction to Agricultural Assistance Package

“We appreciate President Trump and Secretary Perdue recognizing the challenges faced by U.S. farmers as a result of the administration’s ongoing trade disputes with some of our major trading partners. Nebraska farmers have been hard hit by flooding, retaliatory tariffs and a tremendous downturn in the agricultural economy. Today’s announcement of a trade assistance package could help many farmers through this difficult time in agriculture.”

“Farmers would rather have open markets. Stable, predictable, transparent, international trade, that provides the agricultural economy with certainty and a clear path to growth, is much more preferable. In 2017 Nebraska sold $979 million of major agriculture commodities to Canada and $889 million to Mexico. We need congressional approval of the United State-Mexico-Canada Agreement (USMCA). In 2017 Nebraska sold $937 million of Nebraska commodities to China. We need good outcomes to current negotiations with China, Japan, and the European Union. Canada, Mexico, and China are three countries critical to boosting Nebraska agriculture and it’s economic growth. This is the long-term solution farmers want to see.” 



Statement from Iowa Corn Growers Association President Curt Mether

We, along with other agriculture groups, are welcoming the $16 billion issued by the Trump Administration today in assistance to help farmers with potential loss due to the recent tariffs and China’s retaliatory tariffs. These funds will be used to calm the destruction of the perfect agriculture storm. Us farmers are caught right in the middle of the agriculture storm with low prices due to the current trade disputes, demand destruction of ethanol by the EPA granting RFS waivers to oil refiners, plus devastating weather conditions this spring. All these factors are affecting farm incomes and farmers need fair treatment during these uncertain times. Although the amount as not yet been issued for bushels of corn, we continue to push for more aid than was given in the first trade aid last year. ICGA issued a call to action last week encouraging members to express to the Administration that one cent per bushel of corn is not enough due to the economic situation for corn farmers. This week, there was a media report stating a draft of the Trump Administration’s plan will allocate 4 cents per bushel of corn.  ICGA has continued daily with the Administration and Congress continuing to state that 4 cents does not reflect trade impact on corn. According to an NCGA-commissioned economic analysis conducted last May, corn farmers suffered a loss of at least 44 cents per bushel in the price of corn. We continue daily to speak up for our corn farmers by saying a couple cents is not enough.



Naig: Farmers Want Long-Term Trade Agreement

Iowa Secretary of Agriculture Mike Naig issued the following statement today in response to the USDA’s announcement that farmers will receive another round of financial aid to help with the damages sustained from unjustified retaliation and trade disruption.

“We appreciate President Trump and the USDA offering an interim solution to assist farmers affected by trade disruption,” said Secretary Naig. “However, farmers want trade not aid. Farmers need markets to sell their products. This current situation is not sustainable. We need long-term trade agreements, and I believe we can get there, but we need China to come to the table to negotiate. It’s also imperative that Congress takes action to pass USMCA as quickly as possible to provide certainty for our farmers and businesses.”



NPPC Applauds Trump Aid for Trade Retaliation

The Trump administration today announced a trade relief package in response to the U.S. trade dispute with China. USDA's trade retaliation relief program includes direct payments to qualifying pork producers, pork surplus purchases for the benefit of low-income families and others in need, and additional funding to develop new export opportunities. The amount of farmer payments and commodity purchases will be announced at a later date.

"We thank President Trump for recognizing that our patriot farmers have borne the brunt of China's trade retaliation," said David Herring, a pork producer from Lillington, N.C., and president of the National Pork Producers Council (NPPC). "The U.S. pork industry has been one of the most adversely affected sectors, receiving a one-two punch in the form of a 50 percent punitive tariff from China on top of the existing 12 percent duty and, until recently, a 20 percent punitive tariff from Mexico. This trade aid will help repair some of the damage inflicted upon U.S. pork producers."

"The current situation in China represents a historic sales opportunity for U.S. pork," Herring added. "The world's largest pork-consuming nation is currently experiencing a dramatic reduction in domestic supply because of an animal disease that has ravaged its national swine herd. We look forward to continued work with the administration to restore favorable access to China, allowing U.S. pork producers to capitalize on this opportunity, reduce our trade deficit with China and deliver enormous benefits to the U.S. economy."

In addition to resolution with the China trade dispute, NPPC urges Congress to quickly ratify the U.S.-Mexico-Canada (USMCA) trade agreement, which preserves zero-tariff access to markets that represent more than 30 percent of total U.S. pork exports.



NPPC Attends White House Event on Trade Aid

The Trump administration today announced a trade reliefpackage in response to the U.S. trade dispute with China. Three National Pork Producers Council (NPPC) members—President and North Carolina producer David Herring, Minnesota producer Randy Spronk and Illinois producer Phil Borgic—joined President Trump and USDA Secretary Perdue for the White House announcement.Untitled_design_(18)_197660.png

"It was an honor to attend this event and represent U.S. pork producers, who have been significantly harmed by China's unfair trade retaliation," said Herring. "We thank President Trump and USDA Secretary Perdue for standing up for U.S. agriculture, restoring zero-tariff trade with Mexico and providing support for American farmers."

China is the largest consumer of pork in the world. Its swine herd has been ravaged by African swine fever, significantly reducing domestic production and increasing pork imports. However, U.S. pork producers have been hamstrung by a 50 percent punitive tariff from China, on top of the existing 12 percent duty. NPPC is eager for a resolution to the China trade dispute. Absent punitive tariffs, China currently represent an historic sales opportunity for U.S pork producers.

Additionally, NPPC urges Congress to quickly ratify the U.S.-Mexico-Canada (USMCA) trade agreement, which preserves zero-tariff access to markets that represent more than 30 percent of total U.S. pork exports. NPPC has designated USMCA ratification as a "key vote" and will closely monitor support of the agreement among members of Congress. U.S. pork exports to Mexico and Canada support 16,000 U.S. jobs.

NPPC also urges the administration to quickly complete a trade deal with Japan, the largest value market and the second largest volume market for U.S. pork exports. Japan's new trade agreements with the European Union and other regions are causing an erosion of U.S. pork market share.

According to Dr. Dermot Hayes, an economist at Iowa State University, U.S. pork will see exports to Japan grow from $1.6 billion in 2018 to more than $2.2 billion over the next 15 years if the U.S. quickly gains access on par with international competitors. Hayes reports that U.S. pork shipments to Japan will drop to $349 million if a trade deal on these terms is not quickly reached with Japan.



Soybean Growers Appreciate Assistance for Now, Still Need Long Term Relief

The news from U.S. Secretary of Agriculture Sonny Perdue of trade mitigation including, most importantly to soy, Market Facilitation Program (MFP) payments and Agricultural Trade Promotion (ATP) program funding, is news welcomed by soy growers who have suffered from the ongoing ill effects of tariffs.

“We recognize and are thankful that these funds will help offset the persisting damage from tariffs, as well as enable new market development through ATP,” said Davie Stephens, president of the American Soybean Association (ASA) and soybean grower from Clinton, Ky.

Stephens reiterated, however, that the soybean industry needs open trade access, saying, “The key word from today’s announcement is “facilitation”: Trade assistance will only facilitate soy growers’ ability to farm, not make their losses whole or tariff woes disappear long term. Trade assistance will only help in the short term.”

The 2019 MFP program under the Commodity Credit Corporation (CCC) Charter Act and administered by Farm Service Agency (FSA) will provide $14.5 billion in payments to producers, among them soy growers. Payments this year, however, will be based not on individual crops as in the past, rather on county-specific rates determined by, “long term distortion from tariff damage,” according to USDA. That single-county rate will be multiplied by a farm’s total planted acreage for all eligible crops to determine payment so that planting decisions are not skewed, and eligible plantings cannot exceed total 2018 plantings. The first payments will begin in late July or early August after Farm Service Agency (FSA) crop reporting is completed July 15th. Second and third payments will be made in November and early January if conditions warrant, USDA has reported.

An additional $100 million will be issued through the ATP to assist in developing new export markets on behalf of producers, along with Food Purchase and Distribution Program (FPDP) relief for other commodities.

ASA appreciates the Administration’s effort to bridge the gap during this difficult time. However, a second round of financial support to offset farm losses is only a partial and temporary solution, and not a permanent solution for soy growers who have lost their number one export market since tariffs were implemented by the U.S. and then China in July, 2019.



Soybean Growers Attend White House Event to Hear President on Trade

After months of hardships suffered as a result of the U.S.-China trade war, American soybean growers accepted an invitation from President Trump to hear his plan to support farmers as the tariff battle with China persists.

“We appreciate that our President understands the plight in which this ongoing feud with China has pushed us, and that he and his Administration have sought ways to ease this burden,” said Davie Stephens, president of the American Soybean Association (ASA) and soybean grower from Clinton, Ky. “But, farmers are resolute that the only real solution is to take away the tariffs that have hemorrhaged our sales and landed our relationship with China on life support.”

Stephens, along with fellow soy grower Josh Gackle, Kulm, N.D., and ASA CEO Ryan Findlay, St. Louis, Mo., were among farmers and leaders from multiple agriculture industries invited to attend Thursday’s press event at the White House in which the President outlined plans for his farm support program, details of which were officially released by the United States Department of Agriculture (USDA) earlier in the day.

While ASA appreciates this effort to bridge the gap during this difficult time, a second round of financial support to offset farm losses is only a partial and temporary Band-Aid and not a permanent solution for soy growers who have lost their number one export market since tariffs were implemented by both countries July, 2019.



NMPF Statement on Federal Trade-Mitigation Package for Farmers
National Milk Producers Federation President and CEO Jim Mulhern

“Dairy farmers have been harmed substantially by disrupted markets. We know that USDA is concerned about the damage being done to dairy farmers by ongoing tariff battles. We hope it will use the full range of tools available to provide a large segment of the payment in the first tranche to appropriately assist milk producers who have experienced a prolonged downturn in prices because of these conflicts,” he said. “We appreciate USDA’s concern for dairy’s needs, and we look forward to working with USDA, Congress and the White House as the department further develops its plans.”

NMPF estimates that producers have lost at least $2.3 billion in revenues through March due to higher tariffs against U.S. dairy, which has lowered milk prices for all producers.



NCGA Welcomes Trade Aid, Continues Call for Equitable Relief and Market Opportunities for Corn Farmers

The National Corn Growers Association (NCGA) today welcomed the Trump Administration’s announcement of up to $16 billion in assistance to help farmers to make up for potential agriculture losses due, in part, to the most recent tariff increases and prolonged trade dispute with China.

“Farmers across the country are struggling. Wet spring weather, trade disputes and tariffs and demand destruction in the ethanol market are forcing farmers to make difficult decisions. We appreciate the Administration’s recognition of these challenges and support for America’s farmers,” said NCGA President Lynn Chrisp who joined President Trump for the White House announcement.

Following President Trump’s announcement that the Administration would be pursuing a second round of trade aid, NCGA put forward recommendations that would provide both short-term assistance and support market access for farmers.

NCGA called on USDA to update the Market Facilitation Program (MFP) to factor market impacts into the calculation of MFP payment rates. NCGA analysis showed an average price loss of 20 cents per bushel from May 2018 to April 2019. As trade talks with China lagged on in March and April of 2019, losses widened closer to 40 cents per bushel.

NCGA is also encouraging additional actions the Administration could take to open markets and provide more certainty to corn farmers, including stopping RFS waivers to big oil refiners and restoring waived ethanol gallons, and resolving trade disputes and tariffs.

“NCGA looks forward to continuing our dialogue with the Administration to craft a complete package that will provide corn farmers with more equitable short-term relief while also supporting and expanding the market opportunities farmers need most,” Chrisp said.



Farm Bureau Statement on Agricultural Relief
American Farm Bureau Federation President Zippy Duvall

“The Trump Administration’s agricultural assistance package is welcome relief to an economic sector that has been battered by foreign competitors and retaliatory tariffs. We thank the President for living up to his commitment to stand by our farmers and ranchers. While farmers and ranchers would rather earn their income from the marketplace, they have been suffering during the agricultural downturn and trade war. This aid package will help us weather the storm as the Administration works to correct unfair trade practices that have hurt the U.S. economy for too long.

“We are grateful for the work that President Trump and Secretary Perdue have devoted to this issue. However, the real, long-term solution to our challenges in agriculture is good outcomes to current negotiations with China, Japan and the European Union, as well as congressional approval of the U.S.-Mexico-Canada Agreement. America’s farmers and ranchers need fair and open access to markets.”



USMEF Statement on Additional ATP Funding

On May 23, U.S. Secretary of Agriculture Sonny Perdue announced another round of agricultural aid designed to offset the impact of retaliatory measures imposed by trading partners. This includes an additional $100 million to be issued through the Agricultural Trade Promotion Program (ATP) administered by the USDA Foreign Agricultural Service (FAS) to assist in expanding export markets. The first round of ATP funding, which totaled $200 million, was allocated earlier this year.

U.S. Meat Export Federation (USMEF) President and CEO Dan Halstrom issued the following statement:

The additional round of ATP funding is greatly appreciated, as U.S. red meat products and other agricultural exports still face significant obstacles in key international markets. ATP funding has been a valuable resource as USMEF works to defend U.S. market share and secure new customers in both established and emerging markets. We thank the Trump administration for recognizing the impact of current trade disputes and other trade barriers on U.S. agriculture, and we look forward to receiving more details about the latest round of ATP funding.



USDA Announces Details of Trade Assistance Package
NFU Urges Adoption of Supply Management Policies

The U.S. Department of Agriculture (USDA) today released initial details for a trade assistance package to support family farmers and ranchers struggling with oversupply and low prices due to international trade conflicts. The agency plans to allocate as much as $16 billion, including $14.5 billion in direct payments to producers through the Market Facilitation Program (MFP). Additionally, USDA has designated $1.4 billion for commodity purchases through the Food Purchase and Distribution Program (FPDP) as well as $100 million for the development of new export markets through the Agricultural Trade Promotion Program (ATP).

National Farmers Union (NFU) supports efforts to address China’s unfair and manipulative trade practices and has repeatedly urged the administration to provide necessary assistance to farmers caught in the crosshairs. NFU President Roger Johnson issued the following statement in response to the agency’s announcement:

“Family farmers and ranchers have been grappling with low commodity prices and excess production for many years now, and the trade war with China and other major trading partners has compounded both problems. We appreciate USDA’s work to mitigate family farmers’ losses as a result of these trade disputes. However, while this trade aid package is an improvement over last year’s Market Facilitation Program, by definition it fails to provide predictable, consistent and adequate relief across American agriculture.

“We are pleased that USDA will be providing payments for a broader range of commodities than were covered under last year’s program. We also appreciate that producers of all covered commodities will receive equitable support. At the same time, basing payments on 2019 planted acres fails to help those who have faced or are facing impossible planting conditions.

“Ultimately, this package is only a short-term fix for a very long-term problem. Farmers rely on markets to make a living. Our ongoing trade wars have destroyed our reputation as a reliable supplier and have left family farmers with swelling grain stores and empty pockets. The very least we can do is provide our country’s struggling food producers with the certainty of a longer-term plan that also addresses the persistent and pernicious problem of oversupply.”



NAWG Responds to Second Round of Support for Farmers Impacted by Trade Disruptions

Today, the U.S. Department of Agriculture has announced that the White House has authorized the Agency to provide up to $16 billion dollars in assistance to farmers who are being impacted by the U.S. trade war with China and other trade disruptions. NAWG President and Lavon, TX farmer Ben Scholz attended today’s ceremony at the White House which focused on this announcement and made the following statement in response:

“NAWG is grateful for the President’s understanding of the stress and damages China’s retaliatory tariffs have had on growers. Further, we look forward to working with the Administration to quickly finalize other trade agreements that open up new markets for wheat farmers.

“While we appreciate the trade mitigation program, it doesn’t make farmers whole. The U.S. exports 50% of its wheat which means we need a long-term solution. This includes getting the U.S.-Mexico-Canada Agreement (USMCA) across the finish line, completing negotiations with China and supporting our WTO case, and closing a trade deal with Japan.

“Lastly, NAWG will continue to work with the Administration and USDA as the Agency crafts a relief strategy to ensure that the program works best for wheat farmers. We are pleased to hear that the USDA will take a broader look that the tariffs have had on all trade deals and markets when considering a longer-term relief package.”